FAQs

General Eligibility

What are the basic qualifications of all business loan applicants?

The basic qualifications for all business loan applicants are:

  • The applicant must live or operate a business in an area served by GAC.

  • The client’s residence status should be determined and documented through a Social Security Number, Tax Identification Number, Green Card, etc.

  • The applicant should have limited or no perceived access to bank business credit.

  • The applicant must be at least twenty-one (21) years of age or older than eighteen (18) with a qualifying co-signer.

  • Must be legally competent to enter into a binding contract.

  • An applicant’s income must be sufficient to repay the loan from GAC.

  • The applicant must have a strong sense of responsibility for the timely repayment of the loan from GAC as well as all other personal and business obligations.

  • Must have invested some savings or personal equity in the business.

What would make an applicant INELIGIBLE?

The following would make an applicant INELIGIBLE:

  • Inability to repay debt as determined by GAC after a full application review.

  • Outstanding tax liens (If you are on a payment plan, please mention this to your loan officer.)

  • Active bankruptcy or a bankruptcy that has been discharged less than 12 months prior to the application

  • Business involved in lending, adult businesses, firearms, real estate development, non-profit organizations, multi-level   marketing programs and other ineligible business.

  • Delinquent mortgage, rent, or child support, or multiple recent charge-offs and delinquencies that have not been addressed.

  • Making false statements on claims on your application

Loan Amounts, Interest Rates and Terms

  1. What is the maximum amount of a loan that I can Borrower?

    GAC currently offers loans up to 100,000 for most programs and up to $200,000 for black owned business seeking to purchase commercial real estate property for their business. Although we are not primarily driven by credit scores, in many cases your credit score will determine the maximum amount of a loan that we will be able to consider as well as your ability to repay.

  2. What are the interest rates charged?

    Currently, GAC’s rates vary from 3.00% to 9.75% and are determined by a number of factors including program to which you are applying, type of business (Start-Up or Existing), term of loan, credit score and other factors.

  3. How much are your fees for applying for a loan?

    GAC currently does not charge a fee for applying for a loan. If your loan request is approved, GAC will charge a one-time origination fee in addition to 3rd party collateral filing fees. In order to reduce the amount of out-of-pocket expenses, for most programs, borrowers are given the option to finance this origination fee to the loan principal at origination.

  4. How long will I have to repay my loan?

    GAC offers loan terms up to 84 months. The term of your loan will be determined by the use of the proceeds, your business operating cycle, credit score and other factors. With the exception of GAC’s commercial real estate loan, most loans are fully amortizing.

  5. Are there fees for paying off loans early?

    GAC does not charge prepayment penalties or other prepayment fees for prepaying a loan in part or in full prior to the maturity. In fact, we encourage early prepayment if your business is in a position to do so.

  6. Will I be required to pledge collateral for the loan?

    Collateral is a helpful contingency but it not always required.  Many of our smaller loans have no collateral requirements, while others are reviewed on a case by case basis.   When collateral is needed to provide enhancements to your loan request, we allow for a great deal of flexibility.  Some examples of collateral can include a blanket lien against general business assets, vehicle titles, equipment and real estate.

  7. Do I qualify for a loan if I have a bad credit score?

    GAC does not based its lending decisions on a credit score, however the amount that you are eligible for, in many instances, will be dependent upon your credit score. Credit is reviewed on a case-by-case basis. Challenged credit score can be mitigated by other factors such as stronger ability to repay, higher collateral values, good liquidity, long term experience within industry.

  8. Will I need a co-signer/co-borrower?

    After an initial review of your loan request, a GAC loan officer will determine if a co-signer is necessary to enhance your loan request. Co-signers are often needed to strengthen the request by either providing additional income necessary to support the debt, mitigate weak credit and/or collateral and may be needed to provide additional business experience.

Loan Types and Loan Uses

  1. What are some typical uses of loan proceeds?

    The loan proceeds must be used for business purposes only. Some examples of business use includes but are not limited to: working capital, equipment purchases, inventory purchases, leasehold improvements, purchase an existing business, or commercial real estate.

  2.  Can I purchase residential investment real estate with loan proceeds?

    No. GAC does not issue loans for the purposes of purchasing real estate for investment purposes. GAC does however have a commercial real estate loan for black owned businesses to purchase commercial real estate that will be occupied by their business.

  3. Can a loan from GAC be used to consolidate other business debt?

    We do not generally offer loans strictly for business debt consolidation, however, on a case-by case basis, we will allow up to 25% of the total loan proceeds to be used to pay off existing debt if the debt will improve the organization’s position and repayment ability. For further information regarding this, please contact one of our loan officers.

  4. I have a home-based business. Am I eligible to apply for a loan?

    Absolutely! GAC offers loans to a variety of business types including home based business, retail business with physical storefronts, professional services business, manufacturing businesses, online business. You do not need a physical location in order to be eligible for a loan with GAC.

  5. Can my Non-Profit organization obtain a loan from GAC?

    No. We are not able to provide loans to Non-Profit and/or Not-For-Profit organizations.

  6. I have not yet formally incorporated my business. Am I eligible to apply for a loan?

    Of course. Many of GAC loans are loans to individuals (but are used for business purposes) or sole proprietors or d/b/a. Please keep in mind, if you are a start-up business, a portion of the proceeds can be used to cover organizing expenses. We do also offer loans to legal entities such as General and Limited Partnerships, Limited Liability Corporations, Sub-Chapter S Corporations and C-Corporations.

  7. What types of businesses are eligible to apply for a loan?

    As a community-based and mission driven Community Development Financial Institution (CDFI), Greenwood Archer Capital (GAC) offers loans to many different types of businesses, most common are service and retail businesses, restaurants, caterers, childcare businesses, personal health and wellness businesses, construction contractors, light manufacturers, professional and other service providers businesses, and transportation and logistics companies, to name a few.

  8. What types of businesses are ineligible to apply for a loan?

    Businesses that engage in weapons sales, non-profit organizations, real estate development for investment only purposes, residential real estate rehabs or leas, money lending or financing, multi-level marketing programs, illegal or polluting activities, or adult entertainment are among those that are not eligible for financing with GAC. This list is not exhaustive. If you have additional questions regarding your businesses’ ability to apply, contact one of GAC’s loan officers to discuss.

Other General Loan Questions

  1. What happens after I submit my loan application?

    One our GAC’s loan officers will contact you upon receipt of your application and will follow up with you to discuss your request, ask for any additional information that is necessary to process your application or request to schedule a site visit at your business, if applicable.

  2. Should I need more money than your program allows, can I apply for a loan with other micro-lenders as well as with GAC?

    While we commend you for being proactive with raising funds for your business, we are concerned about the amount of debt your business takes on. Our experienced lenders are happy to provide you with a preliminary review to help you with determining your ability to repay a higher amount. If your business’ financial needs and capacity to repay are greater than the maximum amounts offered by GAC, we are happy to refer you to similar lenders that may be able to accommodate your request.

    If you have already applied for financing through a similar micro-lender, we encourage you to continue through the process with that lender, unless other unusual circumstances exist. We do not encourage multiple requests at the same time. Each micro-lender will evaluate the total debt obligations and this amount will be reviewed when determining your ability to take on additional debt.

  3. What geographic areas does GAC lend?

    Currently GAC’s lending is reserved for the greater Cook County, Illinois areas including Chicago and its surrounding suburbs as well as parts of Northwest Indiana.

  4. Do I need a business plan to apply for a loan?

    GAC requires a business plan or a business canvas model if your business has been operating for less than six (6) months. The business plan or business canvas model should include at minimum, a marketing strategy and cash flow projections for at least 24 months, detailed by monthly the 1st year. The business plans does not have to be extensive in length, as long as the pertinent points of your new business are addressed. Feel free to contact one of our lenders for information on organizations that may assist with writing your business plan.

  5. I’m concerned about the big bank processes where loans are underwritten by someone who I have not met.

    GAC is not bank and does not operate as such. GAC underwrites its loans internally. We strongly believe that your loan officer should know you best. We also believe that knowledge of your business market and the markets that you work with are key factors in understanding your business, therefore we have local loan officers and underwriters in house to service your needs. Generally, the loan officer that first receives your request and interviews you for consideration of your loan will also be responsible for underwriting and and working with you throughout the entire process from application to funding. This lender will likely continue to be your relationship manager once approved for financing. GAC believes that you are more than a number and that your GAC representative should be considered your trusted advisor and can provide ongoing business development resources to you for as long as you need to help enable you to continue to do the great work that you do for your community.

GAC’s Application Process

  1. What if I’m not sure about applying and/or have additional questions
    Our experienced loan officers are happy to speak with you and answer any questions that you have regarding GAC’s application process. Please feel free to contact us – call us at (773) 341-2060, or email us at loans@greenwoodarchercapital.org